Uganda says negotiating with IMF for $ 900 million budget support loan
“We applied, negotiations are underway,” Deputy Treasury Secretary Patrick Ocailap told Reuters.
“We have not yet concluded negotiations on the loan, but we hope that it will be approved soon.”
The loan would be for general budget support and would be disbursed over three fiscal years, he said. The country’s next fiscal year begins in July.
Uganda has imposed one of Africa’s toughest coronavirus lockdowns, which included shutting down all but the most essential businesses. Economic activity subsequently plunged, with GDP contracting 1.1% last year.
The IMF loaned Uganda $ 491.5 million last year, one of several loans the country has secured from various sources to help absorb the economic blow from COVID-19.
A new loan will potentially increase growing concerns over Uganda’s ability to repay its burgeoning debt, which is expected to exceed 50% of GDP by June.
Last month, the East African country said it could approach its major creditors to negotiate a possible suspension of loan repayments after its indebtedness rose 35% in a single year. As of December 2020, Uganda’s total public debt stood at $ 18 billion, two-thirds of which is held by external creditors, according to the finance ministry.